This potential purchase is part of Egypt's ongoing efforts to privatize state-owned assets, a program that has faced delays, according to regional media reports.
Emirates NBD, Dubai’s largest bank by assets, has initiated due diligence to acquire a stake in Banque du Caire, Egypt’s sixth-largest commercial bank.
This potential purchase is part of Egypt's ongoing efforts to privatize state-owned assets, a program that has faced delays, according to regional media reports.
The sale of Banque du Caire would be the latest in a series of state asset sales, as Egypt aims to raise up to $2.5 billion during the 2024-2025 fiscal year through privatizations.
This is in line with broader economic reforms after securing an $8 billion loan from the International Monetary Fund (IMF) last year. However, the IMF recently stressed that more decisive reform implementation will be crucial for Egypt’s recovery.
Banque du Caire, owned by the state-run Banque Misr, holds assets of $9.4 billion (EGP 478 billion) as of September 30. Reports suggest that Banque Misr plans to sell a 45% stake in Banque du Caire for up to $1.2 billion, with additional shares potentially being listed on the Egyptian stock exchange. Sources say the deal could be finalized within six weeks.
Emirates NBD Egypt, the local branch of Emirates NBD, has assets totaling $3.1 billion, making it the 20th-largest bank in Egypt, according to S&P Global Ratings.
Both Banque du Caire and Emirates NBD Egypt have seen strong profit growth, mainly due to increased net interest income from higher interest rates. Banque du Caire reported a net profit of $277 million (EGP 8.6 billion) for the nine months ending September 30, nearly doubling its profit from the previous year. Emirates NBD Egypt also saw a 64% rise in net profit for 2024, reaching $172 million (EGP 5.3 billion).
This surge in profits follows a significant hike in Egypt’s benchmark interest rate, which rose to 27.25% from 19.25% at the end of 2023, boosting lending margins for banks.
Fitch Ratings upgraded Banque du Caire’s credit rating to B from B- last November, reflecting a similar upgrade of Egypt’s sovereign rating. The ratings agency anticipates improvements in Egypt’s real GDP growth, inflation reduction, and the stability of the Egyptian pound by the end of 2025.
